Senate Committee On Finance Vote On The Nomination Of Timothy Geithner To Be Treasury Secretary

Statement

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SEN. CANTWELL: Thank you, Mr. Chairman. And I do think it's been -- I'm not a new member of the committee, but I do think I'm the second member or so from Washington State given Scoop and Maggie's (ph) long history. So I think that's probably since 1930 since there was a member from Washington State on this committee. So I've enjoyed --

SEN. BAUCUS: Was Maggie (ph) on the committee?

SEN. CANTWELL: I don't believe so.

SEN. BAUCUS: (Inaudible) -- he's appropriations.

(Cross-talk.)

SEN. CANTWELL: It was some -- somebody before that. So it was quite a while away. So I've appreciated my time on this committee representing the State of Washington.

And I also want to say, Mr. Chairman, I think -- at yesterday's hearing, I think you basically characterized my concerns about the entire financial situation with your statement, I think in round two, to Mr. Geithner. And that is that I think our country and our country's economy is known for innovation, for the hard work, the skills of our work force, for the ingenuity of the American people, whether that's in agriculture, whether that's in manufacturing, in aviation or in software.

But a lot about our economy of late has been determined by the financial markets and what's transpired in the financial markets. And I look at this nomination. And I want to know whether the smartest guys in the White House are going to find out what the smartest guys in the room have been doing. I mean, that's how they're characterized, right, in books and novels now, the smartest guys in the room, these people on Wall Street who can cook up the latest financial tools and outfox our regulatory system.

And it's not just happened once. It keeps happening again. And it's not whether it's Enron today or credit default swaps of the moment. It's what's going to be the next financial tool that's going to be cooked up.

And so to me, while I very much appreciate and consider the title of secretary of Treasury as a great honor to be bestowed on someone, the title that I'm even more interested in, that Mr. Geithner will hold, is chairman of the President's Working Group on Financial Markets. This particular group, in the past, has really held the keys to what the administration's framework on a regulatory oversight is going to be.

And for the last several years that we, in Congress, have tried to get our hands around the derivatives issue, we were constantly thrown the recommendations of the President's Working Group not wanting to do anything on the regulatory side of derivatives.

It was just this past 2000 and -- I think 2000 and -- maybe it was actually 2008, maybe 2007 when we finally, after five years, got the Enron loophole closed. But really what stymied it for so long was the former advisers to the President's Working Group, who kept saying no, we don't want to do anything to close those loopholes. So Mr. Geithner will be in a very important position to influence the regulatory framework moving forward.

So yesterday I asked him a series of questions about credit default swaps, about position limits, about exactly how he wanted to move forward on the regulatory framework, and what he thought the promises of doing that were, as well as what the faults of the current system had been. And I'd have to say that I wish Mr. Geithner probably would have been more specific about the president's plan and -- moving forward. But I understand that they are still under development on that.

So I come to this hearing today with a lot of concern about where we're going to get as a Congress on that regulatory issue. But like many of my colleagues here, I think about what the president's choices are in presenting this nominee to us. And I appreciate that the president has chosen someone who is not from Goldman Sachs, hasn't spent a ton of time making money on Wall Street, but has basically been a public servant in various regulatory oversight positions, at the New York Fed and at the IMF.

And so I am going to support Mr. Geithner today in hopes that we can work with the administration on what the new regulatory framework will be, and that we will have a more transparent system as it relates to TARP and to the use of those funds; but that this administration will be aggressive at putting in a new framework that really does say that this administration and Congress, whether it's in coordination with the SEC and the CFDC, is going to allow those industries that have made our country so great, the financial framework to continue their success.

It is not a $62 trillion credit default swap industry that has made our country great. Nor will it be the lack of oversight and regulation of that industry that will pull us out of this economic crisis. Only transparency and the proper regulatory framework will allow us to get our financial markets to allow the American economy and what has made us great to be restored.

So I look forward to working with Mr. Geithner and holding him accountable to his promises of a very strong regulatory framework for our country.

I thank the chairman.

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